Pigeon wrote on Mar 5, 2014, 14:57:The biggest problem I think that would occur are massive layoffs as companies try to avoid that initial hit.

I guess my thought on this aspect of a minimum wage hike is that the layoffs probably won't be as massive as the Chamber of Commerce, or other business lobbyists, would like to make us think, and that the benefits of a higher minimum wage would outweigh the immediate employment costs. Standard microeconomic models make it pretty clear that price floors lead to surpluses, or in the case of labor markets, a minimum wage SHOULD lead to surplus labor, i.e. unemployment increases. That said the standard micro-economic models make a lot of assumptions in their predictions, primarily that employers are A) already operating at 100% maximum efficiency and B) are completely rational in all decision making. Those are big assumptions to make. What if an employer's operations are less than maximally efficient? Well than he could still maintain his bottom line in light of a minimum wage hike without cutting payroll if he addressed those non-labor inefficiencies, say by using cheaper raw materials, or not wasting as much raw material. Likewise, let's say he is operating at 100% efficiency, and the minimum wage hike is cutting into his bottom line: is his first response to layoff employees, some of whom he may have grown to like and value as people, and not just economic producers in his employ? Perhaps his sense of responsibility to his employees, an emotional and non-economically rational factor, makes him choose to take a cut to profits rather than do harm to someone he cares about.

Furthermore, the problem with all economic models is it is very difficult to conduct experiments. In chemistry, you come up with a model, make predictions using that model, and then you conduct experiments to see if the results of the experiment match the predictions of the model. If the results don't match the predictions, then the model is wrong. That's how science works. In economics however, you can't conduct an experiment because of the ethical dimensions -- what if your experiment ruins the livelihood of thousands of people? What this means is models may make sense on a logical level, but there is always a question mark of whether they reflect reality. The standard microeconomic models are pretty darn clear that higher minimum wage leads to higher unemployment, but without repeated experimental verification how do you know if the model itself is accurate? Well, the close that you can come in economics is to look for natural experiments, i.e. in the case of the minimum wage, try to find two different jurisdictions with relatively similar economic situations, but where one raises the minimum wage and one does not. If unemployment rises dramatically in the former, as your model predicts, then there is more credence to your model. If not, then your model may have some problems. Here's the thing: the natural experiment evidence on the minimum wage suggests that while there is some increase in unemployment, it is relatively marginal, particularly when compared to the gains you get in terms of, say, getting people out of poverty.

Economics is all about trade-offs. Certainly raising the minimum wage will have some negative consequences. The question is will the benefits outweigh the costs? My sense at any rate -- and partly this judgement is colored from having to work minimum wage for a while despite being a college educated adult, i.e. not a high school kid on his first summer job -- is that there will be more people who will be better off than will be hurt.

xXBatmanXx wrote on Mar 5, 2014, 14:41:I respect Buffet for what he has done in the media and speaks against the class warfare. Having many friends who work service industry, gotta respect his attitude of $15.00 min wage (I personally don't agree - but I have to respect it).

I used to be against a min wage increase but after more research I've completely turned around on it. When you look at how little wages have increased relative to inflation and contrast that against the massive rise in wealth disparity (executive compensation has gone through the roof for example) there can be no doubt that the middle class need help. The dual income lower middle class especially is really in trouble and that means their kids are in bigger trouble. Higher minimum wages tend to provide an economic surge as well, middle class spending is the primary driver of the economy. I'm all for a minimum wage increase, I'd prefer it would be for larger corporations who can afford it instead of Mom & Pop type stores. The problem there is they have effectively no political representation these days and corporate lobbies literally shit money everywhere.

The biggest problem I think that would occur are massive layoffs as companies try to avoid that initial hit.

That right there is the problem. Corporations start cutting with their workforce despite executive compensation being totally ridiculous. Profit and at the top enrichment over all other concerns.

Well....the CURRENT issue with increasing min wage is that the small businesses just pass off the increased costs to their customers. So you are robbing from peter to pay paul. I have a lot of friends (service industry) who own/work/etc small biz, bars, restaurants, service companies, etc., and they have flat out said "the increase in vegetables has forced me to increase my food costs" and "Obamacare has forced me to increase prices" and "if min wage goes up my prcies go up" and "gas prices has increased my prices from vendors and I pass that on to the consumer".

How is that helping anyone? Increase min wage by 30%, increase all goods by 30%.....sooooo....

Net zero. I am simplifying it to prove a point (econ major and did a shit ton of research on similar topics, taxes, bla bla bla) - but I think a greater attempt than just demanding it be raised must be attempted.

Anyway....my wife works 3 jobs. She is a service industry gal. She has nothing to show for 20+ years of work. Is that her fault? Yes and no. She does have some investments because of a family member pushing her to invest years ago, but she is in the minority in that sense. It would directly benefit our house, but not in the current ideology. Min wage jobs typically (here is where I become curt and dismissive) are not life long jobs (they shouldn't be).

xXBatmanXx wrote on Mar 5, 2014, 14:41:I respect Buffet for what he has done in the media and speaks against the class warfare. Having many friends who work service industry, gotta respect his attitude of $15.00 min wage (I personally don't agree - but I have to respect it).

I used to be against a min wage increase but after more research I've completely turned around on it. When you look at how little wages have increased relative to inflation and contrast that against the massive rise in wealth disparity (executive compensation has gone through the roof for example) there can be no doubt that the middle class need help. The dual income lower middle class especially is really in trouble and that means their kids are in bigger trouble. Higher minimum wages tend to provide an economic surge as well, middle class spending is the primary driver of the economy. I'm all for a minimum wage increase, I'd prefer it would be for larger corporations who can afford it instead of Mom & Pop type stores. The problem there is they have effectively no political representation these days and corporate lobbies literally shit money everywhere.

The biggest problem I think that would occur are massive layoffs as companies try to avoid that initial hit.

That right there is the problem. Corporations start cutting with their workforce despite executive compensation being totally ridiculous. Profit and at the top enrichment over all other concerns.

I can't tell if you linking to a cartoon is a sign of a joke or not. I'd be curious to know what makes Buffett, who's actually a decent guy and actually concerned with job creation (of course, already being a billionaire with nothing to prove helps this, but it separates him from so many others out there) makes him a crook.

I respect Buffet for what he has done in the media and speaks against the class warfare. Having many friends who work service industry, gotta respect his attitude of $15.00 min wage (I personally don't agree - but I have to respect it).

It would be great for injecting more money flow into the economy, as people making $15 are going to be spending almost all of what they make. Much of it in those industries that employee minimum wage workers. It should also increase the tax base so there are less "free-loaders". The biggest problem I think that would occur are massive layoffs as companies try to avoid that initial hit.

Task wrote on Mar 5, 2014, 12:46:Oh yeah and that Buffett guy avoids millions in taxes in offshore accounts, while believing the middle class should be heavily taxed, while his Berkshire company hasn't paid taxes in 10 years. sweet. The poor get poorer, and the rich get richer. nice, good game

None of that is true... He's long called bullshit on the rationalizations for greed which many in his industry put forth, and has been a strong advocate for people who make money through money, rather than labor, i.e. the rich, to be paying taxes on that income as earned income, rather than as capital gains, which are taxed at a much lower rate. In short, he's kind of the antithesis of your typical uber-rich asshole.

Most financiers are scum, sure, but if there was a moral model which we wished our capital owning class to aspire to, Buffett would probably be close to it.

Task is basically babbling. Nothing he's saying is supported. Believes the middle class should be heavily taxed? Links? He believes the top 1% should be much, much heavier taxed.

And Berkshire has paid little taxes, true. But they haven't had to. Do you think they should pay taxes they don't owe? How does that make sense? Do you ever do your taxes, think you should pay more, so you just throw a few hundred more in?

Let's call him a criminal for doing nothing wrong yet often saying our system is totally borked and all we're doing is making the rich superrich!

I can't tell if you linking to a cartoon is a sign of a joke or not. I'd be curious to know what makes Buffett, who's actually a decent guy and actually concerned with job creation (of course, already being a billionaire with nothing to prove helps this, but it separates him from so many others out there) makes him a crook.

I respect Buffet for what he has done in the media and speaks against the class warfare. Having many friends who work service industry, gotta respect his attitude of $15.00 min wage (I personally don't agree - but I have to respect it).

Task wrote on Mar 5, 2014, 12:46:Oh yeah and that Buffett guy avoids millions in taxes in offshore accounts, while believing the middle class should be heavily taxed, while his Berkshire company hasn't paid taxes in 10 years. sweet. The poor get poorer, and the rich get richer. nice, good game

None of that is true... He's long called bullshit on the rationalizations for greed which many in his industry put forth, and has been a strong advocate for capital gains to be taxed as earned income, i.e. make the rich pay the same percent in taxes as those whose income comes from a paycheck. In short, he's kind of the antithesis of your typical uber-rich asshole.

Most financiers are scum, sure, but if there was a moral model which we wished our capital owning class to aspire to, Buffett would probably be close to it.

Task wrote on Mar 5, 2014, 12:46:lol no I'm not joking, tell that to Lobbyists - Legalized Corruption. Civilized Corruption, Crook-Topia. Many oxnymoron names. Give a Demo, Repub as much as much money as possible and they'll vote for the same private interests. All Legal. They are all about oxymoron's.

and this makes Buffett a crook how? Do you know much about him other than him being rich? Hell, he agrees with axis that congress is full of morons with no interest in getting things done, as he says in the link, and he believes the rich need a much higher tax rate.

but keep spewing generalizations and calling him a crook and citing it with babble and cartoons rather than facts and actions. Typical for some of the uninformed, indefensible positions some posters here love. Don't read, don't cite, just post something angry and pretend you're always right. Great, RollinCuttr

lol no I'm not joking, tell that to Lobbyists - Legalized Corruption. Civilized Corruption, Crook-Topia. Many oxymoron names. Give a Demo, Repub as much as much money as possible and they'll vote for the same private interests. All Legal. They are all about oxymoron's.

Oh yeah and that Buffett guy avoids millions in taxes in offshore accounts, while believing the middle class should be heavily taxed, while his Berkshire company hasn't paid taxes in 10 years. sweet. The poor get poorer, and the rich get richer. nice, good game

You do realize that "legalized crook" is an oxymoron. Only doing illegal things makes one a crook. If society has chosen to legalize what he does then he isn't a crook irregardless of what that may be.

I can't tell if you linking to a cartoon is a sign of a joke or not. I'd be curious to know what makes Buffett, who's actually a decent guy and actually concerned with job creation (of course, already being a billionaire with nothing to prove helps this, but it separates him from so many others out there) makes him a crook.

You do realize that "legalized crook" is an oxymoron. Only doing illegal things makes one a crook. If society has chosen to legalize what he does then he isn't a crook irregardless of what that may be.